Alibaba and JD.com commit nearly US$330m to beef up parcel delivery efficiency, ahead of Singles’ Day shopping festival

China’s two largest e-commerce giants have committed nearly US$330 million to strengthening their parcel delivery efficiency, ahead of this year’s Singles’ Day shopping festival.

Cainiao Network, Alibaba’s logistics arm, is offering 1.5 billion yuan (US$228 million) to its Chinese merchandisers and logistics partners to build more warehouses and improve delivery efficiency ahead of the country’s annual “Singles’ Day” online shopping spree, on November 11.

Shi Miao, a Cainiao vice-president, said this year’s event is expected to generate a billion deliveries during November 11 and 16, citing figures from the State Post Bureau.

Cainiao will work with its partners to set up 40,000 pickup facilities close to residential areas which will allow consumers to fetch their goods directly instead of having to wait for them at home.

Some 200,000 “smart” courier cabinets will also be used this year within housing estates, where parcels can be collected by customers.

The Hangzhou-based company has already build what it calls “super warehouses” which are run by robots in a number of Chinese cities, including Shanghai, Tianjin, Zhejiang, Guangdong and Hubei, to strengthen its sorting efficiency.

Shi also said that very latest artificial intelligent and big data technology will be used to help logistics firms avoid congestion on the road.

Cainiao plans to have a delivery workforce of more than three million people for this year’s event, after the Alibaba-led event generated sales of US$17.8 billion last year, a 32 per cent surge on 2015.

China’s largest e-commerce giant which also owns the South China Morning Post, Alibaba is, however, expecting stiff competition for business during the shopping spree.

Its major rival JD.com, the second-largest e-commerce company in China, has already announced it’s spending 666 million yuan (US$101 million), to subsidise merchants on JD.com for warehousing and distribution costs, occurred from stocking up goods for the coming Singles’ Day.

In April, JD.com announced the creation of a new business unit, JD Logistics, and the company has vowed to invest further in automated warehouses and drone deliveries.

Nationwide, JD.com says it owns seven major logistics centres and 335 warehouses in 2,691 cities, towns and counties.

JD.com chairman and chief executive Richard Liu Qiangdong said during its own “June 18” midyear shopping festival, around 40 drones were used to deliver goods, from four of the country’s 30 administrative divisions, adding it now plans to expand that capacity considerably for November 11.

The value of orders placed on JD.com exceeded 110 billion yuan, between June 1 and 18, he said.